KUALA LUMPUR (Sept 5): The FBM KLCI settled down 0.81 point or 0.05% at 1,599.08 at Bursa Malaysia's afternoon break on profit taking after rising with world share markets, as investors evaluated news on China and the US' agreement to hold high-level trade talks in early October in Washington.  

The ringgit strengthened with the yuan against such sentiment.

At Bursa, the KLCI settled down at 1,599.08 at 12:30pm, after rising to its highest so far today at 1,603.79. In currency markets. The ringgit strengthened to 4.1930 against the US dollar at 12:44pm, after appreciating to its firmest level so far today at 4.1885.

Reuters, quoting China's commerce ministry's statement, reported today saying China and the US have agreed to hold high-level trade talks in early October in Washington, amid fears an escalating trade war could trigger a global economic recession. It was reported that the announcement followed a call earlier in the day between China's Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.

It was reported that Asian shares extended gains on Thursday and U.S. stock futures jumped, after China said it will hold trade talks with the US in early October, raising hopes they can de-escalate their trade war, before it inflicts further damage on the global economy.

In currency markets, it was reported that risk-sensitive currencies such as the Aussie and yuan rallied on Thursday, as investors cheered the announcement of US-China trade talks for next month and abandoned safe haven assets such as yen. The Australian and New Zealand dollars, Chinese yuan and South Korean won all jumped against the dollar, while the yen fell nearly 0.4% to 106.75 per dollar, its cheapest in more than three weeks, according to Reuters.

In Malaysia today, Hong Leong Investment Bank Bhd wrote in a note: "Although yesterday’s (KLCI) bounce would help offset concerns about the decelerating global economy, which deepened after a slew of weak PMI readings and the resumption of the latest round of US and China tariffs last week, the risk-on mood may be premature, as sentiment remains buffeted by external and domestic issues, coupled with the final decision by FTSE Russell on local government bonds ratings on the World Government Bond Index soon."
 
"Nevertheless, we still anticipate positive news flows ahead of the Budget 2020 (11 Oct), further rates cut by Fed/ BNM to cushion slowing economy, trade diversion and M&A activities to provide a lift to our lull market," Hong Leong said.

Across Bursa Malaysia today, 1.14 billion shares worth RM731.01 million were traded.

Top gainers included MISC Bhd, while leading decliners included Axiata Group Bhd.